Campari buys majority stake in Wilderness Trail Distillery

Italy’s Campari Group has agreed to acquire a 70% stake in Kentucky-based Wilderness Trail Distillery for US$420 million.

As part of the deal, Aperol owner Campari Group has the option of buying the remaining 30% stake in the whiskey distillery in 2031.

Launched in 2012, Wilderness Trail Distillery is based in Danville, Kentucky. The distillery produces Bourbon and rye whiskey, including six-year-old and eight-year-old Bourbons.

Bob Kunze-Concewitz, CEO of Campari Group, said: “By adding the fast-growing super-premium Wilderness Trail brand we further expand and premiumise our Bourbon offering, priming it to become Campari Group’s second major leg after the apéritif portfolio.”

Campari said American whiskey is among the ‘hottest’ spirits categories in the States. Citing figures from the Distilled Spirits Council of the US, Campari said the category accounted for 13% of the country’s total spirits markets in 2021 by value, up 7% versus the previous year. The super-premium price segment climbed by 17%.

Campari Group’s American whiskey portfolio includes the Wild Turkey brand and its high-end Russell’s Reserve, alongside the company’s ultra-premium Whiskey Barons Collection, comprising the Old Ripy, Bond & Lillard, and William Butler Saffell brands.

In August, the firm took a 15% stake in banana-flavoured Bourbon Howler Head from Catalyst Spirits.

Bourbon expansion

The move will allow Campari to “significantly expand” its production capacity and ageing inventory to meet future growth of its premium Bourbons, including Whiskey Barons, which is “currently capped due to capacity constraints”, the group’s CEO said.

Kunze-Concewitz said Wilderness Trail would also “further enrich” its Rare portfolio, a division created in May 2021.

The distillery’s founders and current shareholders, Shane Baker and Dr Pat Heist, are fermentation experts with more than 20 years’ experience in the production of whiskey.

Wilderness Trail uses a proprietary infusion mashing process and sweet mash technique with a ‘highly flexible output’ as a result of the multiple mash bills and yeast strains.

Baker and Heist called the acquisition a “win-win” situation.

In a a joint statement, the co-founders said: “Premium Bourbon and rye whiskies and state-of-the art production facilities coupled with worldwide distribution, first-class marketing and expertise across multiple spirit categories provide the perfect foundation for the continued success of the Wilderness Trail brand and ensure it will be enjoyed around the world for years to come.”

In 2021, Wilderness Trail’s full-year net sales reached US$40.8m, with the company’s Bourbon and rye brands generating US$7.2m in sales.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) reached US$22.7m.

Wilderness Trail is expected to report a sales increase of 39% to US$57m for the 2022 full year, with EBITDA predicted to hit US$37m.

Campari said the total enterprise value for complete ownership of Wilderness Trail is US$600m, 16 times the expected EBITDA.

The agreement, which is subject to customary closing conditions, is expected to close by the end of this year.

Last week, Campari Group revealed it had acquired a minority stake in London-based incubator Catalyst Spirits and recorded double-digit gains for the first nine months of 2022.

Wild Turkey’s sales rose by 22.1% for the nine-month period, while Russell’s Reserve increased by 36.6%.